Crypto mining has become a controversial activity outside the industry because it has now got to harm the environment by consuming enormous amounts of energy. Bitcoin, especially, requires extensive computational power that is wasteful for the environment. The cryptocurrency still uses the old PoW consensus mechanism, while other blockchains moved to PoS for better scalability and improved security.
One of these cryptocurrencies is Ethereum, which had developed considerably after the Merge when even the Ethereum price surged in response to the increased interest in this innovative digital coin. Newest coins are also looking for more sustainable mining techniques or even giving up on mining for similar alternatives.
Regardless, mining is important in the crypto sector because it enables the creation of blocks of transactions properly, which paves the way for rewards. There’s another problem ―GPUs are incredibly expensive, pushing miners towards second-hand buying. But how safe is this practice?
Why are mining GPUs this expensive?
In the beginning, crypto mining was so easy to perform that anyone could do it with a basic computer or even a laptop. However, as networks got more congested and the demand for digital coins increased, mining became more difficult, requiring more complex computers and systems to withstand the power it took to mine.
This sudden increase in the demand for graphic cards drove up the price, and the situation seems to continue since mining is still strenuous. There might be ways to make mining easier because Ethereum is currently working on future upgrades to make mining easier for more investors besides those who can afford it.
Recent stats show a decrease in GPU prices as mining starts to lose ground
Last year, Ethereum mining fell as crypto prices were affected by the crypto winter. Immediately, this change led to less expensive GPUs. This was also when Ethereum moved from PoW to PoS, which would later change mining into being more approachable.
The prices will always change depending on the mining situation, and considering how blockchains are slowly giving up on it, it may happen that GPUs won’t be that expensive in a couple of years, allowing customers from different target audiences to afford these graphic cards.
Still, miners buy second-hand GPUs to cut costs
On the other hand, most miners who don’t afford expensive technologies or yield massive returns are buying already-used GPUs to cut costs and try to mine for more consistent income. However, this is a dangerous practice, and the risks of inserting a used component in the computer might outweigh the benefits.
First, used GPUs will make greater efforts to work on medium to heavy complex tasks, including mining, which only wears them out more, so in the end, purchasing a new one is still a better option. Another concerning issue with used GPUs is that their VRAM modules are reduced, meaning their lifespan decreases the more they’re used, meaning that a newly bought 10GB of VRAM GPU will only have 8GB at the second use; this ultimately affects capacity and memory bandwidth, which will considerably decrease performance.
Finally, there’s no warranty included in purchasing a second-hand GPU, so you can’t rely on warranty coverage, even if the contract hasn’t expired yet. Many manufacturers specify they won’t cover warranties for GPUs used for mining.
Of course, GPU has excellent alternatives that are less expensive and leverage at least a similar efficiency. This is about ASICs, designed to mine specific coins, so they’re great for plenty of cryptocurrencies. ASICs are also better in terms of hash rate because they can solve complex puzzles and generate new currency faster. ASICs are also user-friendly, so even beginner miners can use and install them in a few simple steps.
However, even ASICs have limitations; for example, they’re incredibly loud and get hot immediately, which can become a fire hazard if left unattended. At the same time, they can’t be described as flexible, so you can’t use them for anything other than mining. On the other hand, GPUs can be converted for other purposes when they no longer serve miners.
Which is more profitable, ASIC or GPU?
Mining profitability depends on a series of factors, from the goal of a miner to the mining rig built. But it’s generally known that ASIC is used for specific operations while GPU has a broader range of use. However, ASIC is a more powerful mining tool, making it costly to update.
Regardless, ASIC seems to be more profitable as they’re more efficient on a dollar-to-watt basis and inexpensive, despite their increased demand. Still, miners should be aware of their limited flexibility, and it might not be the best choice for small to medium-sized miners but rather for companies or organizations. Therefore, first-time miners should work with GPUs instead.
Still, is mining profitable at all?
Of course, investing in expensive computational power seems counterproductive when the returns are insignificant. Crypto mining has some advantages because, for example, miners don’t have to invest in the stock market and expose their portfolios as investors do.
At the same time, the potential earnings highly depend on the implication level and the power of the mining rig. However, there isn’t much active work involved, meaning hardware needs to be left running continuously for consistent returns.
Mining can also be risky due to the considerable upfront costs of mining equipment and electricity. That’s because mining Bitcoin, for example, can reach similar energy levels to entire cities. Mining can also pose fire hazards since computers tend to heat up a lot, especially when ASICs power them. Finally, the high energy consumption and greenhouse gas emissions form together a true danger to the environment.
Mining cryptocurrency is a vital activity for the whole blockchain, and it involves purchasing expensive computational power to leverage genuine income. Still, the prices of these computers’ parts tend to be too much for miners, so they buy second-hand graphic cards, which are unreliable at all. Unfortunately, new graphic cards must be included in a mining rig for long-term and consistent returns.